Nick McKim (Tasmania, Australian Greens) Share this | Hansard source

I rise to speak on the Taxation (Multinational—Global and Domestic Minimum Tax) Bill 2024 and I can inform the chamber that the Greens will be supporting this legislation. We will be doing so for a range of reasons, but in the main because it aligns Australia with the Two-Pillar Solution which has been agreed to by the OECD and the G20, and that Two-Pillar Solution, of course, seeks to reform international taxation rules to improve the taxation of multinational corporate profits.

But I do want to say that we think this bill should be going far, far further than what is proposed in this legislation, and also Labor should be doing much, much more to make big corporations pay their fair share of tax in this country so that we can invest in programs and supports for people, like, for example, putting dental and mental health into Medicare. I'll have a bit more to say about the things that Labor could be doing to make big corporations pay their fair share of tax in Australia but are not doing because they accept obscenely large political donations from those big corporations, including the big supermarket corporations, the big fossil fuel corporations, the big gaming corporations and the list goes on.

This bill implements internationally agreed rules to ensure that multinational corporations with an annual global revenue of A$1.2 billion or greater are subject to a global minimum tax rate of 15 per cent. Putting a floor on the global tax rate for large multinationals is a good thing, and that is one of the reasons the Greens will be supporting this bill. If a multinational entity has a parent or subsidiary company based in Australia but relies on an international tax haven to pay less than 15 per cent at a group level of tax, Australia will be able to apply a top-up tax. While this represents a small step forward in addressing the profit-shifting behaviour of big multinational corporations, it needs to go much further. In Australia, our corporate tax rate is 30 per cent. Fixing a global minimum corporate tax rate of half of Australia's corporate tax rate is far too little. Fifteen per cent is close to the soft rates charged by tax havens like Ireland, Switzerland and Singapore. It'll do little to end the damaging race to the bottom on corporate tax or to rein in the widespread use of tax havens.

The bill is set to increase tax receipts by $370 million over the next five years. That is a good thing, but let's be clear about this: when you take the massive multinational corporations that operate in Australia as a collective group, including things like big pharma companies and big tech companies, that represents a very small drop in the ocean of the profits that those companies extract from our country and our people every year. So we urge Labor to use its position as a member of the G20 and the OECD to advocate for a global minimum corporate tax rate of 25 per cent, which is far closer to Australia's corporate tax rate and is about the weighted average of OECD countries.

Labor are not going to do that—we know that—because they are a party beholden to the oligarchs and the big corporations, but that is what Labor should be doing. If we set the global minimum corporate tax rate at 25 per cent, that would far more effectively reduce the incentive for corporations to artificially inflate the amount of deductible expenses in high-tax jurisdictions. It's also the rate that organisations such as Oxfam, the Tax Justice Network and the Centre for International Corporate Tax Accountability and Research have tirelessly advocated for, including in their submission to the inquiry on this legislation. I want to thank those organisations for that tireless advocacy and for their important work at both a national and a global level to reform our tax and financial systems, address corporate greed and make corporations pay a fairer amount of tax so we can put in place supports that would reduce economic inequality in Australia and help people who are being crushed at the moment by the cost-of-living crisis.

Another issue with the two-pillar solution is that, of course, it favours wealthy countries, with far fewer benefits for countries in the Global South. This is because the right to apply a top-up tax is given, in priority, to the home country or countries of residence of the multinational corporation by applying an income inclusion rule, while the host country's right to top up tax on profits at source is only a fallback. As a result, the two-pillar solution benefits countries where multinational corporations already attribute high levels of profit under current rules—jurisdictions which act as investment hubs or conduits for profit shifting. Estimates show that most Global South countries will gain little or no additional tax revenue directly from the global minimum corporate tax, and, since its rules are highly complex and highly complicated, joining the scheme would not be cost effective for most of those countries. Again, the Greens are asking Labor to increase its efforts to assist democratic governments in the Global South to obtain their fair share of tax revenue from the profits of multinational corporations doing business in their countries.

Notwithstanding the concerns that I've raised, we will absolutely be supporting this legislation. But the aim here from Labor and from Labor's global advocacy should be to prevent the continuation and exacerbation of the present unfair and ineffective approach and maintain the momentum towards a more comprehensive reform that delivers more equity and fairness than the reform that we are currently debating. A fair way to do this would be based on unitary taxation of multinational corporations, with apportionment based on where the corporations are actually doing business and not on their artificial legal structures. That is a proposal that has been advanced by the Tax Justice Network, and I commend them for the work they've done to develop that proposal and for their advocacy of it. A proposal like that could benefit countries and multinational corporations alike by establishing a simple, effective and fairer system for multinational corporate taxation.

We want to see Labor go further. We want to see them go beyond the bare minimum and use their power on the international scene to advocate for strong international tax reform that would rein in the profit-shifting behaviours that we far too often see from multinational corporations and deliver benefits not only to Australia but to countries in the global south, who are going to disproportionately miss out on the tax revenue that they are due from big multinational corporations.

I also want to take this opportunity to talk about corporate tax in Australia and the things that Labor should be doing, but isn't doing, because of the institutionalised bribery of political donations. Labor needs to crack down on corporate profiteering, and it needs to act to make corporate price gouging illegal. The ABS, the Australian Bureau of Statistics, has collected data since 1960 on the share of the economy that goes to profits versus the share of the economy that goes to wages. In the 64 years of collecting this data, corporate profits as a share of the economy have never been higher than they are today, and wages as a share of the economy have never been lower. Think about that for a minute, colleagues. It means that corporations are making off like bandits to an extent that they never have since this data started being collected well over half a century ago. Workers, the people who go to work every day and earn a wage, have never been receiving less of the share than they have since this data started being collected 64 long years ago.

The corporations are doing very nicely in this country, thank you very much, and the workers are doing terribly. It's because governments of both political stripes over the last 50-plus years have been far more interested in acting on behalf of corporations than they have on acting on behalf of wage-earners and ordinary Australians. Corporate profits are at record highs, the amount of money flowing to corporate profits has never been higher, and people are being crushed by inflation, and the RBA's response has been to engage in a record series of interest rate rises.

The lived experience of Australians—who are currently struggling to make ends meet; currently struggling to put food on the table, currently struggling to afford to pay their power bills; and currently struggling with rent increases and interest rate rises, which are smashing mortgage holders—is borne out in some of the data that we are seeing. The big banks are raking in billions of dollars in profit. They are rewarding their CEOs with multimillion-dollar annual salary and bonus packages. Corporate profits as a share of the economy have never been higher. Wages as a share of the economy have never been lower. One-third of the top 100 largest corporations in this country pay no tax at all. Corporations are price gouging Australians. Their profits are going through the roof, and millions of Australians can't afford to put food on the table, pay their rents or keep up with their skyrocketing mortgage payments. Corporations are price gouging, and it is ordinary people who are being smashed as a result.

What Labor should be doing is backing in the Greens on our big corporations tax package that we are taking to the next election as policy. Taken as a whole, the Greens' corporate tax package will raise $514 billion over the next decade. It includes a big corporations tax that will impose a 40 per cent additional tax on excessive profits, which would raise $296 billion over the decade. It includes a revamped tax on offshore oil and gas to close the loopholes in the PRRT, which, as it currently stands, is one of the greatest tax rorts for big corporations in Australia's history—arguably the biggest tax rort that big corporations have ever enjoyed. The other significant component of our big corporations tax is a 40 per cent tax imposed on the superprofits of fossil fuel mining projects, with an exemption for new and vital sectors, like lithium and nickel, that are essential in terms of the renewable energy investment that we need to see in Australia. That tax will raise $107 billion and will ensure that everyone in Australia benefits from the resources that mining companies are extracting.

We could use that $514 billion—the over half a trillion dollars over the next decade that the Greens will raise from our big corporations tax package—to actually help people who are getting smashed with the cost of living. We could afford to build public housing so everyone could have access to a secure and affordable home. We could put dental and mental health into Medicare. We could make university education genuinely free. Most people in this chamber who have a university degree got to enjoy free university when they were studying, whereas now Labor is allowing HECS fees to grow faster than a lot of people can afford to pay them off. It's well beyond time that Labor started backing in the interests of the Australian people over their corporate political donors—well beyond time. It's time that corporations paid their fair share of tax so millions more Australians can lead a more dignified life. It is outrageous that about a third of the 100 highest-earning corporations pay no tax at all—less tax than a nurse or a carpenter or a teacher. It is an absolute, utter disgrace. Labor must do better.